The surprising – and worrying – truth about financial education

Happy New Year, Young Money fans! I hope you had a restorative festive period.

ICYMI, I was very fortunate to present my first radio programme just before Christmas. It was a BBC Radio 4 documentary on financial education, broadcast on Saturday 23rd December at midday and repeated on Christmas Eve at 12pm.

I did quite a few TV and radio appearances in 2017, but getting to present my own programme was on another level. It was a huge eye-opener to see how much work goes into constructing a 24 minute one-off documentary, from selecting the appropriate people to interview to sifting through hours of recorded material to find the good stuff.

It also made me understand just how much work is done behind-the-scenes in radio, by dedicated and focused people who tend to slip under the radar. So to that end, I want to thank the producer, Alex Lewis, and editor, Andrew Smith, who put a massive amount of thought and energy into the programme.

I thought I knew quite a lot about financial education, having written about the subject frequently over the past six years. But what we found out while researching the programme was astounding.

Firstly, it is far from certain that financial education actually works. There is hardly any research out there that focuses on whether money lessons can steer young people onto a much more stable financial trajectory. Yes, there is data from the British Cohort Study that shows a link between children’s behavioural traits and their later financial outcomes. But not a lot to show how schools could make a critical difference.

So if the experts’ understanding of this area is half-formed, no wonder the general public are yet to be totally convinced. Financial education won’t become a sine qua non for parents and teachers until more data is published to show it works – and published very publicly!

The Cinderella nature of financial education means it gets very little airtime in the media, so any reports about it tend to be brief, superficial and full of misunderstandings.

What I discovered while researching this programme was astounding

For instance, many have assumed that financial education is now prospering in most state schools, thanks to its formal introduction to the English curriculum in 2014, but is at risk of being marginalised due to the rise of academies and free schools – neither of which follow the national curriculum.

The truth is that many academies end up following the curriculum anyway, so the occurrence of money lessons in both maintained and non-maintained schools is roughly the same. And it’s pretty low.

Research produced by the All Party Parliamentary Group on financial education last year found that 60 per cent of state schools in England still aren’t covering the subject.

So handing down orders, and insisting that schools tick this box, counts for very little if certain foundations aren’t in place. And they’re surprisingly basic, making their absence all the more frustrating.

Surprisingly, funding doesn’t seem to be the primary problem (although it is important). Awareness is half the battle – the APPG research shows that many schools aren’t even aware of their duty to teach money. The next sizable obstacle to overcome is confidence. Teachers don’t feel able to do this subject justice, so they shy away from it.

The majority of schools still aren’t teaching money

And it’s largely down to the private and charitable sectors to provide the resources that schools end up relying on. If only their efforts were more cohesive and joined up. I was disappointed to see just how little collaboration was happening between various parties working in this area.

We came across various individuals and groups who were coming up with really innovative ideas that seemed to be having tangible effects wherever they were being applied. One of those was the bMoneywize boardgame, which we ended up mentioning in the programme. But initiatives like this just aren’t being recognised by more established organisations who (relatively speaking) have the largesse to make things happen.

But this wasn’t entirely new to me. I have spent quite a few years trying to work with organisations in this sector, and it has been a dis-spiriting experience. Besides the work I do through my blog, I produced a book in 2016 that I felt would complement the financial education mission very well – it’s up-to-date, written in a youth-friendly way by someone who understands the financial dramas facing today’s whippersnappers better than most. And it has the additional advantage of being totally independent.

But if you have something worthwhile to offer in this area, it’s not enough to contact various organisations and put forward a convincing case. It seems you have to be a major name (aka Martin Lewis) with major commercial interests (the site MoneySavingExpert is owned by the comparison website MoneySupermarket, which makes money by linking to financial deals on its website). So inevitably, that means a handful of commercially-driven individuals and companies can set the agenda for financial education.

Initiatives aren’t getting the recognition they deserve

This is worrying for two reasons. Firstly, no market benefits from domination by an oligopoly, let alone any educational field trying to shape young minds. Surely we should be aiming for more diverse, creative and “real-world” approaches to education – in all subjects? For instance, the bMoneywize game was conceived by a working mum for her kids and their friends to use. We attended a bMoneywize session hosted for mums in East Dagenham, and they told us the game had opened up conversations about money in their BME community where such discussions were scarce. I wrote Spare Change after my experiences as a young person getting to grips with money after the financial crash. These examples show there are people out there who have something valuable to offer the next generation – not just old white men!

Secondly, those currently calling the shots in financial education are always liable to pursue their own interests, above and beyond what’s good for the next generation. However good their intentions might be, anyone who is sponsored by organisations whose primary purpose is to make money off consumers is going to be at best conflicted, at worst unduly influenced in almost every respect, from what they decide is important to how it should be taught.

Perhaps these risks would be reduced if the financial education sector received more government funding. But this isn’t going to happen anytime soon. As I previously reported, the current Conservative position is to prioritise maths education over financial education, and the issue wasn’t mentioned at all in the last Labour manifesto.

Besides, I wonder if culture, rather than cost, is the real issue. There is a huge amount of committed and transformative work being done within financial education, but this doesn’t cover up the fact that there is are too many established interests taking the helm and not enough interaction with the real world. Only when the financial education sector actively seeks to include more voices, more approaches and more diversity within its approach that it will REALLY win hearts and minds – as it so desperately needs to.